iSelect attracts ASIC interest as profit forecast falls short
The corporate regulator will review the accounts of iSelect after questions were raised about profit forecasts given in its prospectus.
iSelect announced a $13.4 million after-tax profit on Thursday, less than the $14.5 million forecast in a table on page 5 of its prospectus.
Its shares fell 6 per cent on Thursday and more than 12 per cent on Friday, continuing the poor performance since it listed on the ASX on June 24 at $1.85.
It is believed the Australian Securities and Investments Commission is aware of the apparent discrepancy between the forecast and the actual result.
iSelect spokesman Matthew Cuming declined to say whether ASIC had been in contact over the results. "I don't go into discussions with regulators with the media," he said.
However, he defended the prospectus, saying it had been reviewed by lawyers and approved by auditors. "We complied fully with our requirements under ASIC guidelines," he said.
The difference between the forecast in the prospectus and the actual result was largely caused by the costs of iSelect's float.
Page 60 of the prospectus includes a lower profit forecast figure - including those costs - of $13.4 million.
Mr Cuming said the table on page 5 referred potential investors to the information on page 60.
"The prospectus has to be read in its entirety - you can't just refer to one page," he said.
"You cannot selectively pull out information like that."
Asked why the company did not disclose the lower profit forecast on page 5, he said: "We're not required to."
On Monday, iSelect hit back at critical media coverage and "inaccurate commentary" in a three-page announcement to the ASX.
The shares fell for the ninth day in a row on Tuesday to $1.35, down 1.8 per cent, or 2.5¢.